I recently took a short holiday to California, to stay with American friends. Whilst there I was able to discuss with one of their immediate neighbours, who I knew was a successful local Real Estate broker, how she secured her fees .I wanted to know why both seller & buyer seemed content to pay the markedly higher commission rates than we see here. The broker charged 5%, with this split 2.5% being paid by the vendor & 2.5% by the buyer. Clearly living close to the on-line world headquarters for many leading brands, the broker was very aware of computer-based sales agencies and the power of the internet. The response however surprised me, not least because it has ramifications here.
The reply was as follows;
''With the numbers of properties coming to the market falling, especially in the popular locations, how can vendors successfully achieve their best price without a broker, skilled in negotiating, being involved with the transaction. The computer brokerage will market a price but it will not negotiate especially when more than one party expresses serious interest & once the price rises to the suggested asking level or beyond. Sellers clearly can heavily lose out and this is widely acknowledged locally by sellers when they decide to sell.''
In the conservation area where I was staying, restricted by height & history, this limited stock was an issue locally. Another resident flagged to me how they had been pushed on a particular house to go to best bids over the guide price then pushed again. They were happy they managed to secure the property knowing that the location was somewhere they wanted to be for many years ahead.
In a Birmingham context I can see popular Inner-City areas like the Jewellery Quarter which has a blanket restriction on height soon starting to echo the position seen already in other popular UK towns, villages & smaller cities. The numbers of resale properties available are falling annually and buyers are becoming more focussed about living in particular locations especially as they see themselves living there longer than might have been the case ten years ago. Vendor's are waking up & realising they can really benefit from having experienced estate agents working on their houses or apartments who are both knowledgeable & are directly in touch with the likely buyers, plus have the skills to secure the best sales figure.
Is this perhaps a nail in the coffin of the on-line agencies for certain locations?